Merck KGaA has been dealt a major blow in Europe after advisors to the continent's regulator rejecting the German firm's oral multiple sclerosis treatment cladribine.

The European Medicines Agency's Committee for Medicinal Products for Human Use has issued a negative opinion regarding the marketing authorisation application for cladribine tablets as a treatment for relapsing-remitting MS. The CHMP says that based on currently available data the benefits of the drug do not outweigh its risks.

Elmar Schnee, head of the company's Merck Serono division, said "we are disappointed by the CHMP opinion but remain fully committed to the potential" of cladribine. He added that with "the considerable support of the MS community and backed by the recent approvals in Australia and Russia, we will continue to work with the CHMP to address the committee’s concerns".

Merck says it is evaluating "all options to gain approval in the European Union, including a potential appeal to request re-examination of the submission by the CHMP". Mr Schnee added that the company is determined to "pursue a way forward to make cladribine available to patients from the European Union".

The news comes in the same week as Novartis' MS drug Gilenya (fingolimod) was approved by the US Food and Drug Administration, putting it ahead of Merck in the race to be first with an MS pill in the main markets. Investors are concerned and at 10.05am (UK time), Merck shares were down over 9% to 63.73 euros.